AIG Owes $10 Billion For Bad Trades

It’s been reported that American International Group, once the world’s largest insurer, owes around $10 billion to other financial services firms for trades that have gone bad. Apparently, these trades haven’t been explicitly disclosed before and aren’t covered by terms of a current $150 billion federal government rescue package. The government’s rescue package was meant to save AIG from collapse, but according to a report in the Wall Street Journal, the newly-discovered trades raise further questions about how the insurer will raise money to pay the debts. I suspect there is much more to come on how truly bad AIG has been.